Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Overseas Merchandise Trade (Imports, August)

Data Flash (New Zealand)

Overseas Merchandise Trade (Imports, August)

Key Points

Statistics NZ reported a provisional trade deficit of $345m for the month of August compared with a revised deficit of $137m in July. The annual deficit was $3,093m in August, compared with $3,174m in July. The provisional outcome represents a $81m improvement compared with the deficit of $426m reported in August 1999. Due to seasonal factors, large deficits are common at this time of the year - the average deficit for August over the past 10 years is $208m.

The overall trade deficit was in line with the median market expectation for a deficit of $349m. However, both imports and exports were much stronger than the market expected, probably reflecting an underestimation of the impact of the weakening exchange rate on the estimated NZ dollar value of exports and imports.

Over the past eight months, exports have tended to be revised up $25-50m with the release of the final estimate (due to processing errors, last month saw a $170m upward revision but steps taken by Statistics NZ suggest that errors of this magnitude are unlikely to be repeated). A continuation of this trend would see the final trade balance improve marginally when the final August merchandise trade estimates are published on 10 October.

Following a weaker than expected July, exports have rebounded in August. The estimated level of exports in August was 27.7% higher than a year earlier, while exports for the three months to August were 24.0% higher than a year earlier. We estimate that around 17% of this movement reflects higher prices, with the remainder reflecting higher volumes. Detailed export data will be made available with the final trade release.

Import values in August were 19.1% ahead of the same month last year, while imports for the three months to August were 17.3% higher. As the table below shows, imports of oil were especially strong in August, reflecting not just higher prices, but a 60% rise in volumes compared with the 12 month average. It seems reasonable, therefore, to expect lower oil imports in September.

Imports of consumption and other intermediate goods were also quite strong.

However, our estimates suggest that almost all of the annual growth in imports can be explained by higher prices. This suggests that import volumes are broadly static, in keeping with recent trends in domestic demand.

Market reaction: there was no reaction to the data.

Commentary

Today's outcome was broadly in line with our expectations. Consequently, we continue to remain confident that the trend improvement in the trade balance remains intact and that this will lead to an improvement in the current account balance over the next year or so. We expect the current account deficit to remain at around 7% of GDP until Q4 2000, at which time the impact of on the trade balance of unusually strong imports in Q4 1999 (due to the importation of a frigate) will drop out of the annual calculation. We expect the current account deficit to decline to 5.5% of GDP by March 2001 and 3.9% of GDP by March 2002. The average deficit over the past 15 years has been 4.7% of GDP.

Darren Gibbs, Senior Economist, New Zealand


This, along with an extensive range of other publications, is available on our web site http://research.gm.db.com

In order to read our research you will require the Adobe Acrobat Reader which can be obtained from their website http://www.adobe.com for free.

For answers to your EMU questions, check Deutsche Bank's EMU web site http://www.db.com/emu or email our helpline business.emu@db.com.


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Frog Recruitment: Kiwi Workers Reluctant To Make Business Trips Across The Ditch Despite Trans-Tasman Bubble Opening

When the trans-Tasman travel bubble opens today, many Kiwi companies won't be rushing to buy an air ticket, reluctant to cross the ditch to do business. The latest survey conducted by leading recruitment agency, Frog Recruitment of nearly 1,000 New Zealand ... More>>

Tourism: Employers Welcome Back Working Holidaymakers

Tourism businesses gearing up for the return of Australian visitors from next week will be relieved to learn that they will also have access to an offshore pool of much-needed job candidates, Tourism Industry Aotearoa says. Tourism employers around ... More>>

Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>


Stats NZ: Prices For Transport And Housing Rise In March 2021 Quarter

Higher prices for transport and housing led to a 0.8 percent lift in the consumers price index in the March 2021 quarter, Stats NZ said today. Prices for getting around rose in the March quarter. Transport prices rose 3.9 percent, the biggest quarterly ... More>>

Stats NZ: New Report Shows Impact Of Demands On Land In New Zealand

A new environmental report released today by the Ministry for the Environment and Stats NZ, presents new data on New Zealand’s land cover, soil quality, and land fragmentation. The land cover data in the report, Our land 2021 , provides the most ... More>>

ALSO:

Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>